Humana Inc.’s (HUM – Analyst Report) first-quarter 2015 operating earnings came in at $2.47 per share missing the Zacks Consensus Estimate of $2.54. However, results improved from $2.35 earned in the year-ago period.
The year-over-year upside was driven by share repurchases, and improved performance across its segments that was triggered by membership growth.
Humana Inc. – Quarterly EPS | FindTheCompany
Including a 35 cents tax benefit associated with the pending divestiture of Concentra, Humana’s net income was $2.82 per share, which compared favorably with the year-ago income of $2.35.
Revenues at Humana for the reported quarter climbed 18.1% year over year to $13.8 billion. Higher medical membership in the Retail segment led to an increase in premiums and services revenues. These, in turn, drove overall revenues in the reported quarter. The top line also exceeded the Zacks Consensus Estimate of $12.4 billion.
Quarterly Review
Humana’s consolidated benefit ratio, which reflects the percentage of benefit expenses in premium revenues, were 83.1%, deteriorating 80 basis points (bps) year over year. The year-over-year increase of the ratio was largely attributable to an increase in ratios in both the Retail and Group segments.
Humana’s consolidated operating cost ratio, which reflects the percentage of operating costs in total revenue less investment income, decreased 120 bps year over year to 14.2%. The improvement primarily resulted from a decline in ratios in the Retail and Group segment.
Quarterly Results by Segment
In Apr 2015, some of its businesses were reorganized and renamed, per which the Employer Group segment was renamed Group segment. As a result Humana now manages its business through three segments: Retail, Group and Healthcare Services. In addition, the company will continue to report results for those businesses which do not align with the reportable segments described above, mainly the company’s closed block long-term care insurance policies, under the category of Other Businesses.
Retail Segment: The segment’s pre-tax income increased 1.6% year over year to $375 million due to an increase in benefit ratio.
